When it comes to costs, the cold hard truth is that most Americans live on a very thin margin. According to a recent survey from Charles Schwab, our neighbours are struggling to make ends meet at the end of the month, with ~59% of U.S. adults saying they live paycheck to paycheck. Furthermore, nearly half of those who participated say they rely on credit card debt to keep ahead despite struggling to keep up with the payments. The upside is that if you take a look at how you spend, you’ll likely find many areas in which you can trim expenses and give yourself back some money. 

Check out these nine helpful suggestions to cut your expenses and save you money. After all, the sages at MoneyWizard.ca want nothing more than for our readers to enjoy the magic of deep pockets!

1. Track Your Spending Habits 

Keeping on top of your spending will clearly illustrate where you’re going wrong (and where you’re going right). This way, you’ll notice something you believed to be a minor expense (eg take-out coffee) is setting you back $300 every 2 months. “The solution to your money problems isn’t more money,” wealth manager and best-selling author David Bach writes in his 2019 book “The Latte Factor.” Instead, he says, the answer lies in forming “new habits.” Tracking your expenses isn’t all that challenging. Look over your debit and credit card statements and hold onto receipts for cash purchases. From there, it’s possible to differentiate between needs, wants, and what you can do without. 

2. Re-Evaluate Your Subscriptions 

These days, things such as gym memberships, streaming services, and other similar subscriptions combine to increase your monthly recurring expenses.  Some of these subscriptions are valuable because you actually use them. Unfortunately, you subscribe and forget much of the time only to be saddled with a bill for something you rarely think about. Examine all your subscriptions and decide whether you need or even want them. Then go through the cancellation process, even if the company in question makes it difficult. You can save hundreds of dollars a month by merely following our advice on this front.  

3. Consolidate Your Debt and Lower Interest Rates 

Credit card debt comes with interest between 16% and 30%. When you can’t pay these balances off immediately, it might make sense to consolidate/combine those debts with a company that charges more affordable rates. You’ll have one straightforward monthly debt payment that costs less than many personal loans or credit card balances. Also, debt consolidation eliminates debts in 3 to 5 years compared with credit cards, which may take up to 20 years to pay off when making minimum payments. Clearly, you’re better served with a consolidation loan or debt management plan.

4. Reduce Your Home Insurance and Auto Premiums 

Any car owner or homeowner is stuck with a monthly payment for both home and car insurance.  It’s stressful to shop for policies but comparing premiums is a worthy endeavour when you find something more affordable. Note that you needn’t wait until your current policy expires to switch your auto insurance—you can leave without being charged a penalty. Switching homeowner’s insurance isn’t as straightforward. 

Still, investigate whether your company reduces rates when you make improvements. For example, some providers reward people who install smoke alarms, burglar alarms, and carbon monoxide detectors. Furthermore, these organizations react positively to upgraded electrical and heating systems.

5. Put a Freeze on Your Credit Cards and Go Cash Only

Unsurprisingly, paying with money you don’t have isn’t the most financially advantageous approach to living. As such, when short on liquid assets, many people will hide away their credit cards so that they aren’t stuck paying ludicrous interest over the long haul. This way, you’re paying cash only with money you have readily available.Make it more official by visiting your issuer’s website or app and freezing it to prevent purchases. Recurring payments will continue on the card, but you won’t pile up your debt any further.

6. Review Your Cell Phone Services

We tend to settle for less than optimal cell phone costs if only to avoid any hassles. Automatic payments are the norm, and excessively priced bills might go unnoticed. However, aligning with big-name providers usually means you’re being unfairly charged. You’d be wise to investigate smaller carriers (eg Verizon, Sprint, T-Mobile, Freedom). Even if the capabilities and features aren’t as compelling, these smaller brands tend to give you what you need at a favourable rate. 

7. Sign Up for Rewards Programs

We’re not suggesting that you sign up for all the reward programs. But you should consider deepening relationships at companies with whom you shop the most and learn whether they offer loyalty perks. At the end of the day, you shop at these places, and you’d be wise to investigate whatever savings are available. When it comes to groceries, for instance, PC Optimum points come to mind. These are necessities, ager all, and compiling these rewards often leads to a free week’s worth of food every few months.

8. Lower Your Housing Expenses

Consider these three facts:

• Those earning less than $50,000 per year spend ~37%-plus of their wages on housing. 
• Experts suggest that 30% of your income be dedicated to housing. 
• Mortgage providers prefer applicants who spend approximately 28% of their pre-tax income on housing.

If you’re above the suggested amounts, logic dictates that you should cut down on housing expenses. Provided you’re renting, consider seeking out a new roommate, giving up a paid parking space, undertaking DIY repairs for rent discounts, or moving to a more affordable area.

Alternatively, homeowners should consider refinancing to negotiate a lower interest rate and decrease monthly payments. You may also consider renting out a portion of your home. You might also benefit from selling your home and renting until you’re on steadier financial footing. 

9. Pay Off Your Outstanding Debts

One of your most important considerations is credit card debt owing to the high interest charged. When you promptly pay off these balances, it becomes far likelier that you can store money aside. Due to the high cost of borrowing, you’ll want to pay well over the minimum on these debts. So, when you create a budget, leave room in there for making significant payments. Debt consolidation is an option worth considering for paying off these debts as quickly as possible. And see if you can add extra principal payments to your mortgage or car loan to reduce them faster. 

Conclusion

The sages at MoneyWizard.ca have one recommendation. Don’t wait. Don’t hesitate. Don’t delay.. Get started today! The sooner you start, the more you’ll save. Acquiring wealth isn’t all about earning a larger income. Find that extra cash by cutting into your expenses!